Astra Controller Jardine Matheson to Shift Focus Towards Developed Markets

Jardine Matheson, the controller of PT Astra International Tbk, has announced a strategic shift to focus on building exposure in developed Asia-Pacific markets to rebalance its portfolio, which is heavily weighted towards Southeast Asia. The 194-year-old group, which famously began as an opium trader, is undergoing a transformation from a business owner-operator to an investment manager.

Chief Executive Officer Lincoln Pan stated that while Jardines remains committed to developing Astra, Indonesia represents a ‘difficult operating environment’. He noted that authorities recently revoked permits for several international companies, including an Astra subsidiary, citing environmental damage, though the mining permits were later restored after ‘a series of major lobbying’ efforts. Astra’s businesses, spanning automotive, heavy equipment, and mining, currently generate nearly half of Jardines’ profits.

To achieve a better balance, Pan said the group will focus on acquiring companies in developed OECD markets that require less capital. This new direction was signalled by the recent agreement to purchase I-MED, an Australian radiology provider, for USD 2.4 billion. Pan indicated the company aims to complete around three acquisitions of a similar size over the next four to five years, funded primarily by recycling capital from existing assets rather than raising new funds. The group is targeting assets that can deliver higher returns, reviewing holdings that generate less than 7% annually, and has set a new overall target of a 9% total shareholder return over the next five years.